/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050217.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, February 17, 2005, Vol. 6, Issue 34 Headlines A N T I G U A & B A R B U D A LIAT: Presents New Restructuring Plan to Boost Competitiveness A R G E N T I N A AVICOLA DP: Defaulted Debt Payments Prompt Reorganization BANCO HIPOTECARIO: Buys Italian BNL's Local Unit CIELO SUR: Enters Bankruptcy on Court Orders CLUB ATLETICO ROSARIO: Informative Assembly Set for May 3 GRICORT S.R.L.: Declared Bankrupt by Court IL FRIUC: Court OKs Creditor's Bankruptcy Motion INGENIERIA Y MANTENIMIENTO: Initiates Bankruptcy Proceedings MATERIALES CORDOBA: Debt Payments Halted, Set To Reorganize SHIRLY S.A.: Court OKs Creditor's Bankruptcy Call SONEC S.R.L.: Begins Liquidation on Court Orders TRANSENER: Posts ARS121.5 Mln Net Losses for 2004 TRANSPORTES MORETO: Liquidates Assets to Pay Debts WORLD SAT: Files Petition to Reorganize B E R M U D A INTELSAT: Hires Phillip Spector as General Counsel B R A Z I L EMBRATEL: Cuts DDD Rates Nationwide KLABIN: Reveals $500M Investment Plan to Boost Cardboard Output TAM/VARIG: Requests 90 Days to End Code-Sharing Agreement TAM: Records Highest Ever Net Profit C O L O M B I A * COLOMBIA: Fitch To Rate Global TES Bond 'BB'; Outlook Stable C O S T A R I C A ICE: Ponders Regulating VoIP E L S A L V A D O R MILLICOM INTERNATIONAL: Revenue Increases 44% in 2004 J A M A I C A AIR JAMAICA: Planes Return to Service M E X I C O HYLSAMEX: Spin-Off Speculations Puts Stock Value US$2.4B TV AZTECA: Expected to Post Improved Performance for 2004 P U E R T O R I C O CENTENNIAL COMMUNICATIONS: Appoints New Senior VP T R I N I D A D & T O B A G O NBN: Government Fires Board V E N E Z U E L A PDVSA: France's Total Seeks Accord on Sincor II By Aug. PDVSA: Mulls Asset Sale in U.S. - - - - - - - - ================================= A N T I G U A & B A R B U D A ================================= LIAT: Presents New Restructuring Plan to Boost Competitiveness -------------------------------------------------------------- Struggling Caribbean airline LIAT (1974) Ltd. has a new restructuring plan that will make the carrier more competitive, the Barbados Daily Nation reports. The plan, which was revealed Tuesday by LIAT chief executive officer Garry Cullen, will see increased investments in staff training, marketing and public relations, the replacement and expansion of its fleet to all Dash 8 300 series planes and an expanded route network by year-end that could see LIAT flying outside the eastern Caribbean. According to LIAT Chairman, Dr Jean Holder, the EC$44 million lifeline recently injected by the governments of Antigua and Barbuda, Barbados, St Vincent and the Grenadines and Trinidad and Tobago would be used to stabilize the carrier. Following the stabilization phase, Holder said the board would make a presentation to the Caribbean Development Bank for further financing to be used to replace and expand the airline's fleet. Cullen said the funding from shareholder governments, which now totaled EC$78 million, had fully met the recapitalization needs of the airline and that LIAT was unlikely to be "back with a begging bowl" seeking support from its owners any time soon. CONTACTS: ANTIGUA (ANU) City Ticket Office Woods Center, St. John's BARBADOS (BGI) Oliver Haywood E-mail: haywoodo@liatairline.com Tel.: 246 428 8888 246-436-9753 246-426-7140 ST.LUCIA (SLU) Josse Mesmin E-mail: mesminj@liatairline.com Tel: 758 452 3051/2 ST.VINCENT (SVD) Dominique Patterson E-mail: pattersond@liatairline.com Tel: 784 457 1821 ================= A R G E N T I N A ================= AVICOLA DP: Defaulted Debt Payments Prompt Reorganization --------------------------------------------------------- Local poultry producer Avicola DP S.R.L. is seeking to reorganize its debts after defaulting on its debt payments since September 25, 2002. A reorganization, if approved by the court, will allow the company to draft a settlement plan for its creditors in order to avoid a straight liquidation. Court No. 24 of Buenos Aires' civil and commercial tribunal has jurisdiction over this case. Clerk No. 47 assists the court with the proceedings. CONTACT: Avicola DP S.R.L. Aranguren 2391 Buenos Aires BANCO HIPOTECARIO: Buys Italian BNL's Local Unit ------------------------------------------------ Banca Nazionale del Lavoro (BNL), Italy's sixth-largest bank by assets, announced Tuesday that its board has approved the terms for the sale of its Argentine unit to local bank Banco Hipotecario SA. The agreement, which is subject to regulatory approval, will see the sale of 100% of the holding company BNL Inversiones Argentinas and intra-group credit lines to Banco Hipotecario for a total amount of US$207 million in cash. Furthermore, BNL will also receive Banco Hipotecario shares representing a book value of US$25 million, which is equivalent to some 3.7% of Hipotecario's share capital. BNL said the stake in Hipotecario would permit it to maintain a presence in Argentina and sustain Italian-Argentine bilateral activity through commercial agreements with Hipotecario and with the creation of an Italian desk. CONTACTS: Marcelo Icikson Nicolas Vocos Capital Markets Tel. (54-11) 4347-5798 Fax (54-11) 4347-5874 E-mail: micikson@hipotecario.com.ar nmvocos@hipotecario.com.ar Gabriel G. Saidon, Chief Financial Officer Tel. (54-11) 4347-5759/5212 Fax (54-11) 4347-5874/5113 E-mail: gsaidon@hipotecario.com.ar CIELO SUR: Enters Bankruptcy on Court Orders -------------------------------------------- Cielo Sur S.R.L. will enter bankruptcy protection after Court No. 9 of Buenos Aires' civil and commercial tribunal, assisted by Clerk No. 18, ordered the company's liquidation. The order effectively transfers control of the company's assets to the court-appointed trustee who will supervise the liquidation proceedings. Infobae reports that the court selected Mr. Silvio Gustavo Gorbacz as trustee. He will be verifying creditors' proofs of claims until the end of the verification phase on March 30. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the company's accounting and business records. The individual reports will be submitted on May 11 followed by the general report that is due on June 23. CONTACT: Cielo Sur S.R.L. Alfredo Palacios 1165 Buenos Aires Mr. Silvio Gustavo Gorbacz, Trustee Leandro N. Alem 651 Buenos Aires CLUB ATLETICO ROSARIO: Informative Assembly Set for May 3 --------------------------------------------------------- The informative assembly for the Club Atletico Rosario Central reorganization is scheduled on May 3 says Infobae. Creditors of the Company will vote to ratify the completed settlement plan during the assembly. Court No. 8 of Rosario's civil and commercial tribunal has jurisdiction over this case. GRICORT S.R.L.: Declared Bankrupt by Court ------------------------------------------ San Lorenzo-based Gricort S.R.L. is now "Quiebra" - meaning bankrupt, says Infobae. Court No. 12 of the city's civil and commercial tribunal decreed the Company's bankruptcy and appointed Ms. Raquel Lucia Morassi, as trustee for the Company. However, no deadline has been set for the verification of creditors' claims. CONTACT: Ms. Raquel Lucia Morassi, Trustee San Martin 1320 San Lorenzo (Santa Fe) IL FRIUC: Court OKs Creditor's Bankruptcy Motion ------------------------------------------------ Court No. 13 of Buenos Aires' civil and commercial tribunal declared Il Friuc S.R.L. bankrupt, says La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Argen Pool System S.A. The Company's trustee, Mr. Ricardo Sukassian, will examine and authenticate creditors' claims until June 13. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the trustee by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. Clerk No. 26 assists the court on the case that will conclude with the liquidation of the Company's assets. CONTACT: Il Friuc S.R.L. Av. Corrientes 3518 Buenos Aires INGENIERIA Y MANTENIMIENTO: Initiates Bankruptcy Proceedings ------------------------------------------------------------ Court No. 13 of Buenos Aires' civil and commercial tribunal declared Ingenieria y Mantenimiento Electromecanico S.A. "Quiebra," reports Infobae. Mr. Miguel Adolfo Kupchik, who has been appointed as trustee, will verify creditors' claims until March 25. Clerk No. 25 assists the court on the case that will close with the liquidation of the Company's assets to repay creditors. CONTACT: Mr. Miguel Adolfo Kupchik, Trustee Adolfo Alsina 1360 Buenos Aires MATERIALES CORDOBA: Debt Payments Halted, Set To Reorganize ----------------------------------------------------------- Court No. 11 of Buenos Aires' civil and commercial tribunal is now analyzing whether to grant Materiales Cordoba S.R.L. approval for its petition to reorganize. La Nacion recalls that the construction materials supplier filed a "Concurso Preventivo" petition following cessation of debt payments since June 2004. The city's Clerk No. 22 assists the court in resolving this case. CONTACT: Materiales Cordoba S.R.L. Esmeralda 819 Buenos Aires SHIRLY S.A.: Court OKs Creditor's Bankruptcy Call ------------------------------------------------- Shirly S.A. entered bankruptcy after Court No. 24 of Buenos Aires' civil and commercial tribunal approved a bankruptcy motion filed by Casa Dami S.A., reports La Nacion. Working with the city's Clerk No. 47, the court assigned Mr. Roberto Alfredo Mazzarella as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claims to the trustee by April 22. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. CONTACT: Shirly S.A. Tucuman 1429 Buenos Aires Mr. Roberto Alfredo Mazzarella, Trustee Laprida 1411 Buenos Aires SONEC S.R.L.: Begins Liquidation on Court Orders ------------------------------------------------ Sonec S.R.L. will begin liquidating its assets after Court No. 24 of Buenos Aires' civil and commercial tribunal declared the company bankrupt. Local news source Clarin reports that Mr. Jose Migliorizzi filed the liquidation request. The city's Clerk No. 47 assists the court on this case. CONTACT: Sonec S.R.L. Las Heras 3035 Buenos Aires TRANSENER: Posts ARS121.5 Mln Net Losses for 2004 ------------------------------------------------- Argentina's largest electricity transmitter, Compania de Transporte de Energia Electrica en Alta Tension Transener S.A. (Transener), ended 2004 in the red despite higher sales, reports Dow Jones Newswires. In a filing with the Buenos Aires stock exchange, Transener revealed a net loss of ARS121.5 million for 2004, reversing a net profit of ARS59.6 million in 2003. The loss came despite higher year-on-year net sales of ARS305.2 million in 2004, up from ARS275.7 million in 2003. At the same time, its operating costs rose to ARS240.6 million from ARS202.2 million. Transener cited financial results - mainly interest, inflation and exchange rate-generated losses - as playing the greatest role in bringing about the poorer performance on the year. Financial results accounted for ARS145.8 million in losses for 2004, compared with a gain, due to exchange rate differences, of ARS34.7 million during the previous year. Administrative costs increased slightly to ARS32.6 million from ARS31.9 million on the year, contributing to a drop in operating profits to ARS32.0 million, compared with ARS41.6 million during 2003. Regarding its debt, Transener said Tuesday: "The medium term outlook is still difficult to predict, although Transener will continue to work with its financial creditors with the objective of restructuring its debt." Nevertheless, the Company said that negotiations so far "generate a reasonable expectation of reaching an accord in the first quarter of 2005." Transener's slow progress in restructuring debts of US$520 million has left it open to lawsuits and bankruptcy petitions from disgruntled creditors. Argentine oil and gas company Petrobras Energia (PECO.BA) and local investment group Dolphin Fund Management hold equal stakes in Citelec, Transener's holding company. CONTACT: Paseo Colon 728 6th Floor (1063) Buenos Aires Republica Argentina Tel: (54-11) 4342-6925 Fax: (54-11) 4342-7147 Email: info-trans@transx.com.ar Web site: http://www.transener.com.ar TRANSPORTES MORETO: Liquidates Assets to Pay Debts -------------------------------------------------- Transportes Moreto S.R.L. will begin liquidating its assets following the liquidation pronouncement issued by Court No. 18 of Buenos Aires' civil and commercial tribunal. The ruling places the company under the supervision of court- appointed trustee Ruben Oscar Conti. The trustee will verify creditors' proofs of claims until March 10. The validated claims will be presented in court as individual reports on April 25. Mr. Conti will also submit a general report, containing a summary of the company's financial status as well as relevant events pertaining to the bankruptcy, on June 7. The bankruptcy process will end with the disposal of the company's assets in favor of its creditors. CONTACT: Mr. Ruben Oscar Conti, Trustee Corrientes 1967 Buenos Aires WORLD SAT: Files Petition to Reorganize --------------------------------------- World Sat S.A. filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances following cessation of debt payments since August 23, 2004. The Company's case is pending before Court No. 19 of Buenos Aires' civil and commercial tribunal. The city's Clerk No. 37 assists the court with the proceedings. CONTACT: World Sat S.A. Moreno 574/84 Buenos Aires ============= B E R M U D A ============= INTELSAT: Hires Phillip Spector as General Counsel -------------------------------------------------- Global satellite provider Intelsat announced Tuesday that Phillip Spector, a well-known Washington attorney, has joined the company as its Executive Vice President and General Counsel. Mr. Spector joins Intelsat from the international law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, where he was the managing partner of the Washington office and the Chairman of the firm's Communications & Technology Group. Mr. Spector has a strong background in the satellite sector, having represented over his years in private practice not only Intelsat, but also other major satellite operators, including SES Global and PanAmSat. He has also been retained by large users of satellite capacity, and by major satellite manufacturers. A few years ago, a legal publication named him "the leading satellite specialist in Washington," and he has been profiled for his "skilled legal work" in American Lawyer. Conny Kullman, the Chairman of the Board of Intelsat, Ltd. said: "We are delighted that a lawyer of Phil's caliber has decided to join Intelsat at this exciting time in the company's history. Phil's wealth of knowledge of international telecommunications issues, and his extensive experience in the Washington political and regulatory arenas, makes him particularly well-suited to guide our company's legal, regulatory and government affairs activities on a global basis." Mr. Spector, the former Chairman of the American Bar Association's International Communications Committee, said: "I am pleased to be part of the team at Intelsat, a company known throughout the communications industry for its flexible and diverse satellite fleet and strong global presence. With the new ownership group in place, the company is poised to remain a leading innovator in serving its customers with cutting-edge communications solutions." Mr. Spector graduated from Harvard University, where he received a master's degree in public policy and a law degree, magna cum laude, and where he was an editor of the Harvard Law Review. Mr. Spector clerked on a federal appeals court and for Justice Thurgood Marshall of the U.S. Supreme Court, before serving in the White House from 1978 to 1980 as Associate Assistant to the President. He has written many articles on satellite and communications issues, and is the co-author of a book, Communications and Technology Alliances. About Intelsat As a global communications leader with 40 years of experience, Intelsat helps service providers, broadcasters, corporations and governments deliver information and entertainment anywhere in the world, instantly, securely and reliably. Intelsat's global reach and expanding solutions portfolio enable customers to enhance their communications networks, venture into new markets and grow their businesses with confidence. CONTACT: Intelsat, Ltd. E-mail: media.relations@intelsat.com Phone: +1 202-944-7500 =========== B R A Z I L =========== EMBRATEL: Cuts DDD Rates Nationwide ----------------------------------- Embratel is dropping all its basic plan rates for wireline- wireline DDD calls within the same state on a simultaneous basis, any day and any time, all over the country. This unprecedented initiative is designed to make things still easier for the customers, who don't need to spend any more time checking the price lists of other carriers and calculating how much they will spend with their DDD calls. All such benefits are available by just dialing 21, since no enrollment is required. In order to spread the news about the 21, Embratel released last Sunday an advertising campaign made up of two TV films and additional ads issued through radio stations, billboards and the major Brazilian magazines. A campaign was developed by F/Nazca agency for the Southern, Northern, Northeastern and Southeastern states (excluding Sao Paulo) of Brazil, whose main characters are neurons. The main idea consists of showing to the customers that they don't have to "overload their neurons" with rate calculations; all they have to do is dial 21 and save their money and their neurons, because Embratel offers the lowest rates in the market. In Sao Paulo, Embratel launched a campaign developed by AlmapBBDO agency featuring Globo TV's "Casseta & Planeta" performer and hostess Maria Paula, who is in charge of spreading the news. The campaign "Que vantagem Maria leva?" (What do we gain anyway?) uses an old catch phrase well known by the public in Brazil. The film shows a couple talking about the family expenses with their DDD phone calls. The son, who was reading a magazine, enters the conversation and advises the parents to always dial 21 on their calls within the state. The mother then asks "And what do we gain anyway?" (Que vantagem Maria leva?") At that point Maria Paula comes out to explain that Embratel has dropped all its basic DDD rates, and the 21 offers the lowest prices for calls made between the cities of Sao Paulo state. About Embratel Embratel offers a range of complete telecommunications solutions to the market all over Brazil, including local, long distance domestic and international telephone services, data, video and Internet transmission, and is present all over the country with its satellite solutions. CONTACT: Embratel Participacoes S.A. Rua Regenta Feijo 166 sala 1687-B Centro Rio de Janeiro, 20060-060 Brazil Phone: 5521-519-6474 Website: http://www.embratel.net.br KLABIN: Reveals $500M Investment Plan to Boost Cardboard Output --------------------------------------------------------------- Paper producer Klabin SA plans to invest US$500 million in the next four years to raise cardboard output at its Monte Alegre plant to 700,000 metric tons annually from its current 320,000 metric tons, reports Bloomberg. About two thirds of the increased capacity will be used to boost exports to the U.S. and Europe. Klabin is ramping up output as rising exports, coupled with growing domestic demand, has the Company's plants working at near- full capacity, Chief Executive Miguel Sampol Pou said. Sales of corrugated paper, which accounts for 30% of revenue, will grow 5% this year, after rising 12% in 2004 and falling 12 percent in 2003, Sampol said. The investment is also part of the Company's drive to boost sales of higher-margin goods, after selling assets in 2003 to reduce its debt, said Catarina Pedrosa, an equity analyst at Banif Investment banking in Sao Paulo. "The market wants to see the Company selling more products with more valued added to help it improve its profitability, said Pedrosa, who rates the company's stock "neutral," meaning the stock will rise between 5% and 20% in dollar terms by yearend. CONTACT: Mr. Ronald Seckelmann CFO and IR Director Mr. Luiz Marciano Candalaft IR Manager Phone: (11) 3225-4045 E-mail: marciano@klabin.com.br Mr. Gustavo Vittorazze Schroden IR Analyst Phone: (11) 3225-4059 E-mail: gvschroden@klabin.com.br TAM/VARIG: Requests 90 Days to End Code-Sharing Agreement --------------------------------------------------------- Brazil's two largest airlines, Viacao Aerea Riograndense SA (Varig) and TAM Linhas Aereas SA, have come up with a timetable to phase out their code-sharing agreement, reports Dow Jones Newswires. Under the proposal, which was delivered to Brazil's antitrust authority Cade Tuesday, the airlines are asking for a period of 90 days to end the agreement. Cade is scheduled to examine the details at its next meeting on Feb. 23. The decision to end the code-sharing agreement could spell yet more financial trouble for Varig. Cade had originally authorized the code-sharing agreement to resolve Varig's estimated BRL6 billion ($1=BRL2.67) of debt. But reports have it that Varig's financial advisor, Unibanco, is drawing up a restructuring plan for the airline. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ Contacts: Dorival Ramos Schultz, EVP Finance and CFO E-mail: dorival.schultz@varig.com.br Investor Relations: Av. Almirante Silvio de Noronha, n 365-Bloco "B" - s/458 / Centro Rio de Janeiro, Brazil TAM: Records Highest Ever Net Profit ------------------------------------ TAM, Brazil's largest domestic airline, ended 2004 with a net profit of BRL341 million, its highest ever net profit, reports Dow Jones Newswires. Net revenues were BRL4.7 billion, up 25.9% from 2003, TAM said, adding, earnings before interest, tax, depreciation, amortization and aircraft rental, or EBITDAR, reached BRL1 billion for the year, up 34.2% from 2003. The strong performance in 2004 reflects the "severe management of costs" and speedy decision-making, the firm said. During 2004, TAM maintained its leadership in the domestic airline market with an average 35.8% share. This rose to 41.2% in December, primarily due to the collapse of operations at debt-laden Viacao Aerea de Sao Paulo SA, or Vasp. TAM is 72%-owned by Brazil's Amaro family. CONTACT: TAM - Linhas Aereas Av. Jurandir, 856 Jd. Aeroporto - Sao Paulo - SP Zip code: 04072-000 PABX: (011) 5582-8811 Web site: www.tam.com.br =============== C O L O M B I A =============== * COLOMBIA: Fitch To Rate Global TES Bond 'BB'; Outlook Stable -------------------------------------------------------------- Fitch Ratings has prospectively assigned a 'BB' rating to the Republic of Colombia's expected US$300 million-equivalent issue of fixed-rate peso-denominated, U.S. dollar-payable global bonds maturing in October 2015. The rating is equal to Colombia's long-term foreign currency sovereign rating. Colombia's long- term local currency rating is 'BBB-'. The Rating Outlook is Stable. CONTACT: Morgan C. Harting, CFA +1-212-908-0820 Roger M. Scher +1-212-908-0240, New York MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York =================== C O S T A R I C A =================== ICE: Ponders Regulating VoIP ---------------------------- Costa Rica's electricity and telecoms monopoly ICE is seeing a decline in long distance revenues in light of the increasing use of VoIP technology, reports Business News Americas. Many people are opting for VoIP as it is cheaper compared to a direct call. A ten-minute direct dial call to the US from Costa Rica costs around US$3.00, while the same call is just US$0.30 using VoIP. Now, ICE is debating if VoIP is a value-added service, which is to be regulated or if it is a use of public telecoms resources and could be considered fraudulent. Since 1998, ICE has been supporting a bill that, if approved, would mean jail time for those illegally profiting from telecoms services. "VoIP has the characteristics to qualify as a telephone service, it is considered as a substitute for regular service and it requires the use of public infrastructure," ICE assistant manager Claudio Bermudez was reported as saying. ICE recognizes that changes to the bill may be required due to advancements in technology, but that fraud still must be punished, according to ICE legal director Giovanni Bonilla. ===================== E L S A L V A D O R ===================== MILLICOM INTERNATIONAL: Revenue Increases 44% in 2004 ----------------------------------------------------- HIGHLIGHTS: - Record quarterly total subscriber increase for Q4 04 of 859,968 (i) - 27% increase in revenues for Q4 04 to $255.7m (Q4 03: $201.1m)* - 33% increase in EBITDA for Q4 04 to $123.8m (Q4 03: $92.8m)* - Profit for Q4 04 of $25.9m (Q4 03: loss of $10.2m) - Earnings per common share for Q4 04 of $0.28 (Q4 03: loss of $0.16) - 44% increase in revenues for the year to Dec 2004 to $919.3m (2003: $638.6m)* - 43% increase in EBITDA for the year to Dec 2004 to $455.3m (2003: $317.8m)* - Profit for the year to Dec 2004 of $68.2m (2003: $178.8m) - Earnings per common share for the year to Dec 2004 of $0.82 (2003: $2.74) Millicom International Cellular S.A. (Nasdaq Stock Market: MICC), the global telecommunications investor, announced Tuesday results for the quarter and year ended December 31, 2004. Marc Beuls, Millicom's President and Chief Executive Officer stated: "Millicom had a strong year with increasing growth in subscribers quarter on quarter and total growth in revenues for the year of 44%. Today Millicom has reached a total of 8 million subscribers across its operations. This excellent momentum has been created by a combination of additional investment in GSM and price elasticity in our main markets. In 2004 Millicom rolled out GSM across Central and South America and we have rebranded our GSM offering under the Tigo brand. Tigo has enabled Millicom to attract higher spending customers, particularly in Central America, which is our largest region in terms of revenues. In November we launched a GSM network in Pakistan leading to rapid growth, so that by the year-end we had more than one million customers in this market and Paktel has added in excess of 275,000 new GSM customers to date. The other key driver to growth in 2004 has been the price elasticity we experienced following tariff reductions for customers, particularly in Vietnam, which have driven minutes of use for our existing customers, as well as enabling us to penetrate these markets more rapidly as cellular services become more affordable. "This strong growth was achieved whilst operating at an annual EBITDA margin of just below 50%. The margin in the fourth quarter of 48% was impacted by the launch of the GSM service by Paktel in Pakistan. It will take Paktel more than two years to reach the margins it was experiencing prior to the launch of GSM. This will erode Millicom's overall margin somewhat over that period of time. "In December 2004 and January 2005 Millicom successfully raised and settled some $400 million, split evenly between equity and convertible debt, and the proceeds of this will be used primarily for funding our businesses in Vietnam and Pakistan. Negotiations for an extension of our co-operation with VMS in Vietnam are ongoing and a decision on the future of the co- operation is expected in the second quarter. In Pakistan, Millicom extended Paktel's license and is waiting to be offered formal terms by the regulator to extend Pakcom's license." FINANCIAL AND OPERATING SUMMARY* Subscriber growth: - An annual increase in total cellular subscribers of 36% to 7,713,201 as at December 31, 2004. - An annual increase in proportional cellular subscribers of 32% to 5,332,259 as at December 31, 2004. - In the fourth quarter of 2004 Millicom added 859,968 net new total cellular subscribers. - Proportional prepaid subscribers increased to 4,756,113 from 3,550,322 as at December 31, 2003. Financial highlights: - Revenues for the fourth quarter of 2004 were $255.7 million, an increase of 27% from the fourth quarter of 2003. Compared to the third quarter of 2004, revenues increased by 9% from $235.3 million. - EBITDA increased by 33% in the fourth quarter of 2004 to $123.8 million, from $92.8 million for the fourth quarter of 2003. Compared to the third quarter of 2004, EBITDA increased by 5% from $117.4 million. - Total shareholders' equity was $239.0 million at December 31, 2004, compared to ($85.2) million as at December 31, 2003, resulting from the profit of the year 2004, the equity offering and the conversion of the 2% PIK Notes. - Profit for the fourth quarter of 2004 was $25.9 million, compared to a loss of $10.2 million for the fourth quarter of 2003. - Net debt excluding the 5% mandatory exchangeable notes reduced to $327.4 million giving a net debt to EBITDA ratio of 0.72. - Capital expenditure for the year ended December 31, 2004 was $237.0 million. - Total cellular minutes increased by 38% for the three months ended December 31, 2004 from the same quarter in 2003. Prepaid minutes increased by 47% in the same period. - Paktel, one of Millicom's businesses in Pakistan, saw the launch of its GSM network delayed by four months following a dispute with the PTA (Pakistan regulator), which impacted the business in South Asia in the fourth quarter. Agreement was reached in October 2004 when the PTA agreed that Paktel could switch on its GSM network without charge and renew its license for 15 years from October 23rd 2004 for a fee of $291 million payable over 13 years. - On November 8th 2004, Millicom's subsidiary Comvik International Vietnam signed a second Memorandum of Understanding with Vietnam Mobil Telephone Services Company (VMS-MobiFone) expressing the wish of both parties to continue working together in the future in the form of a Joint Stock Company incorporated under the Law on Enterprises of Vietnam. - In November Millicom won a tender for a ten-year license to operate a GSM 900 network in the Republic of Chad, Central Africa. - In December, Millicom extended its cellular licenses in El Salvador and Ghana until 2018 and 2019 respectively. - In the fourth quarter Millicom raised some $400 million. Millicom announced a concurrent offering of 8 million shares in the form of Ordinary Shares or Swedish Depository Receipts (SDRs) and $175 million of 4% Convertible Bonds due 2010 (the "4% Bonds") convertible into Ordinary Shares and/or SDRs. An additional amount of 1 million Ordinary Shares/SDRs and an additional 15% aggregate principal amount of the 4% Bonds were issued upon the exercise of options granted to the managers of the transaction, making the aggregate Share Offering 9 million Ordinary Shares and the aggregate principal amount of the 4% Bonds $200 million. The net proceeds of the offering of the $200 million 4% Bonds were paid and settled on January 7, 2005 in the amount of $195,875,000. REVIEW OF OPERATIONS SUBSCRIBER GROWTH In the fourth quarter of 2004 Millicom's worldwide operations added a record 859,968 net new total cellular subscribers. On a proportional basis, Millicom added 594,538 subscribers, bringing the number of proportional cellular subscribers as at December 31, 2004 to 5.3 million. At December 31, 2004, Millicom's total cellular subscriber base increased by 36% to 7,713,201 cellular subscribers from 5,690,542 as at December 31, 2003. Particularly significant percentage increases were recorded in Ghana (135%), Laos (132%), Tanzania (79%) and Vietnam (79%). Millicom's proportional subscriber base increased to 5,332,259 as at December 31, 2004 from 4,025,577 as at December 31, 2003, an increase of 32%. Within the 5,332,259 proportional cellular subscribers reported at the end of the fourth quarter, 4,756,113 were prepaid subscribers. Prepaid subscribers currently represent 87% of total and 89% of proportional cellular subscribers. FINANCIAL RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2004* Total revenues for the three months ended December 31, 2004 were $255.7 million, an increase of 27% from the fourth quarter of 2003 and of 9% from the previous quarter, reflecting the increasing trend of growth in Millicom's operations. Millicom recorded revenue growth in Africa of 63% to $44.4m in the fourth quarter of 2004 compared with the same period in 2003, with Tanzania producing growth of 85%. Fourth quarter revenues for South East Asia were $64.6 million compared to $50.2 million in the fourth quarter of 2003, an increase of 29% and for South Asia, revenues were $24.9 million, a 15% decrease from the fourth quarter of 2003, owing to the delay in launching GSM services and a reduction in the long distance and international toll charges in Pakistan. The Central American market continued to perform strongly, producing a 30% increase in revenues from $67.4 million for the fourth quarter of 2003 to $87.9 million for the fourth quarter of 2004. Comcel, our joint venture in Guatemala was mentioned in an investigation by the Guatemalan authorities into political donations to the administration of the former President. Such political donations are lawful and common practice in Guatemala and Comcel is confident that these actions will be confirmed as legitimate political support. In South America, revenue growth at 24% has improved significantly and Paraguay and Bolivia produced revenue increases of 27% and 20% respectively. EBITDA for the three months ended December 31, 2004 was $123.8 million, an increase of 33% from the quarter ended December 31, 2003. EBITDA for Africa increased by 90% to $21.8 million in the fourth quarter of 2004 from $11.5 million in the fourth quarter of 2003, due to strong results and a settlement in Millicom's favor of an interconnect dispute in Mauritius. EBITDA for South East Asia was $40.3 million for the fourth quarter, an increase of 65% from the same period in 2003 and South Asia saw a decline in EBITDA in the fourth quarter of 2004 to $4.9 million, due to decreased sales for the reasons mentioned above and increased sales and marketing costs during the period leading up to the launch of the GSM services in Pakistan. Central America recorded growth in EBITDA of 40% from the fourth quarter of 2003 to $44.7 million and the equivalent increase for South America was 37% giving EBITDA of $12.9 million. The quarterly EBITDA margin for South East Asia was 62% and for South Asia it was 20%. Central America recorded an EBITDA margin of 51% and for South America it was 40%. The EBITDA margin for Africa was 49%. Compared to the third quarter of 2004, Group EBITDA increased by 5%. For Africa the increase was 30% and South East Asia and South America both demonstrated growth of over 10% from the previous quarter. FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2004* Total revenues for the year ended December 31, 2004 were $919.3 million, an increase of 44% from 2003. Revenues for Africa were $150.0 million, increasing by 77%. In South East Asia, revenues were $231.8 million, an increase of 32% from 2003 and revenues for South Asia were $113.2 million, up 7%. Revenues for Central America were $305.0 million, an increase of 84% from 2003, reflecting growth and the reconsolidation of El Salvador since September 2003. For South America, revenues were $114.0 million , an increase of 15% from 2003. EBITDA was $455.3 million for the year, an increase of 43% over 2003. Most notably Africa recorded an 85% increase to $65.8 million for the year ended December 31, 2004. EBITDA for South East Asia was $141.3 million, up 37% from the year to December 2003, and EBITDA for South Asia was $49.2 million, down 11%. Central America recorded EBITDA of $155.6 million, up 81%, reflecting growth and the reconsolidation of El Salvador. EBITDA for South America increased 19% year on year to $44.6 million. For the year ended December 31, 2004, the Group EBITDA margin was 49.5%; for South East Asia 61%, for South Asia 43%, for Central America 51%, for South America 39% and for Africa 44%. The profit for the years ended December 31, 2004 and 2003 was $68.2 million and $178.8 million respectively. The basic earnings per common share for the years ended December 31, 2004 and 2003 was $0.82 and $2.74 respectively. The profit for the years to December 2004 and 2003 included, amongst others, a net gain of $21.6 million and $257.1 million respectively, relating to the valuation movement on investment in securities, the fair value result on financial instruments and the gain on debt restructuring. Total cellular minutes increased by 39% for the year to December 2004 compared with 2003. COMMENTS ON FINANCIAL STATEMENTS The net value of licenses increased to $277.5 million in the fourth quarter of 2004. This increase was primarily due to the acquisition and/or renewal of licenses in Pakistan, Ghana, El Salvador and Chad. The value of the Paktel license was recorded at the present value of the total cash outflows payable from 2004 to 2017 of a gross amount of $291.0 million, resulting in a license value of $216.5 million. The unpaid portion of the licenses is recorded under the captions `other non-current liabilities' and `other current liabilities'. As of December 31, 2004, the Paktel license results in a non-current liability of $176.0 million and a current liability of $28.3 million. The license in Ghana results in a non-current liability of $11.7 million and a current liability of $4.0 million. In the fourth quarter Millicom recorded a $7.1 million asset impairment on AMPS and TDMA network equipment as a result of GSM migration in a number of operations. In addition Millicom has decided to shorten the amortization period on AMPS and TDMA network equipment in the relevant markets so that these assets will be fully amortized by the end of 2008. For the fourth quarter of 2004, the conversion to US dollars of the 5% mandatory exchangeable Notes in Tele2 shares (the "5% Notes") resulted in an exchange loss of $31.5 million. This loss was offset by a gain resulting from the valuation movement on the Tele2 shares of $18.0 million and a gain on the fair value result of the embedded derivative on the 5% Notes of $16.3 million. This resulted in a net gain of $2.8 million for the quarter. For the year 2004, the conversion to US dollars of the 5% Notes resulted in an exchange loss of $27.5 million and the valuation movement on the Tele2 shares resulted in a loss of $127.2 million. These losses were offset by a gain on the fair value result of the embedded derivative on the 5% Notes of $148.7 million resulting in a net loss for the year of $6.0 million. The interest expense for the fourth quarter of 2004 comprised prepaid interest and amortization of deferred financing fees on the 5% Notes of $6.4 million, interest and amortization of deferred financing fees on the 10% Notes of $14.8 million, interest expenses of $2.3 million computed on the Paktel license payable, interest expense of $2.1 million due to the early repayment of debt to a former minority holder of El Salvador which was recorded at the present value of the expected cash outflows, and interest expenses on other debt and financing of $5.6 million. `Other operating income' represents a compensation of $3.3 million received from a supplier due to the late delivery of network equipment in Central and South America. The total compensation to which Millicom is entitled amounts to approximately $9.8 million. The compensation is in the form of vouchers to be used for future purchase of equipment. The recognition as other operating income occurs when the equipment is delivered. Millicom currently has a contingent asset of approximately $6.5 million representing compensation that is expected to be recognized as other operating income in the first and second quarters of 2005, when the equipment is delivered. NOMINATIONS COMMITTEE FOR THE 2005 ANNUAL GENERAL MEETING OF SHAREHOLDERS Following the Annual General Meeting of Shareholders of Millicom held in May 2004, a Nominations Committee was created. The Nominations Committee members are Cristina Stenbeck (Chairman), Vigo Carlund and Daniel Johannesson. The Nominations Committee will submit a proposal for the composition of the Board of Directors that will be presented for approval to the 2005 Annual General Meeting of Shareholders that will be held Tuesday, May 31, 2005. Shareholders who would like to suggest representatives for the Millicom Board of Directors can send a letter to AGM, Millicom International Cellular S.A., 75 Route de Longwy, L-8080 Bertrange, Luxembourg or an email to agm@millicom.com. About Millicom Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has a total of 17 cellular operations and licenses in 16 countries. The Group's cellular operations have a combined population under license of approximately 399 million people. To view financial statements: http://bankrupt.com/misc/DecMillicom.pdf CONTACT: Mr. Marc Beuls President and Chief Executive Officer Millicom International Cellular S.A. Luxembourg Phone: +352 27 759 327 Web site: http://www.millicom.com Mr. Andrew Best Telephone Investor Relations Shared Value Ltd, London Phone: +44 20 7321 5022 ============= J A M A I C A ============= AIR JAMAICA: Planes Return to Service ------------------------------------- Passengers of state-controlled Air Jamaica can expect a return to regular flight schedules after two planes, grounded last week for mandatory maintenance checks, returned to serve its routes. Air Jamaica underwent the quality assurance checks upon the recommendation of the United States Federal Aviation Administration (FAA), which had inspected the carrier's planes in December. The Jamaican government provided funding for the check-up. The Asia Intelligence Wire reports that the airline's service bogged down last week as a result of the maintenance checks. Passengers suffered flight delays and cancellations despite prior assurance from the government that the grounding would be conducted during the tourist off-peak season. Air Jamaica had recorded accumulated losses amounting to 600 million Jamaican dollars when the government assumed control on December. CONTACT: AIR JAMAICA Corporate Communications Tel: 876-922-3460 ext 4060-5 URL: www.airjamaica.com =========== M E X I C O =========== HYLSAMEX: Spin-Off Speculations Puts Stock Value US$2.4B -------------------------------------------------------- Analysts believe Mexican steel maker Hylsamex, seen as a takeover target, could be worth about US$2.4 billion or more after a turnaround, relates Reuters. The US$2.4 billion figure for all Hylsamex's stock translates into an offer of MXN45 per share, a 22% premium from its current price levels for its B and L series shares. "They would not be giving it away at that price but it would not be the best price either," said Vector analyst Carlos Hermosillo, adding the figure was at the low end of his price range. Hylsamex is being spun off from its parent company Alfa, one of Mexico's largest conglomerates that sells a range of products from petrochemicals to processed cheese. Alfa, which holds 51% of Hylsamex's voting shares and 42% of all outstanding shares, has yet to call a shareholders meeting to move forward with its spin off, originally scheduled for the first quarter of this year. CONTACT: Mr. Othon Diaz Del Guante Phone: +(52) 81-8865-1240 E-mail: odiaz@hylsamex.com.mx Mr. Ismael De La Garza Phone: +(52) 81-8865-1224 E-mail: idelagarza@hylsamex.com.mx Mr. Kevin Kirkeby Phone: +(646) 284-9416 E-mail: kkirkeby@hfgcg.com TV AZTECA: Expected to Post Improved Performance for 2004 --------------------------------------------------------- The fourth quarter of 2004 could be another period in the black for Mexican broadcaster TV Azteca as a stronger economy is expected to pull profits 7.5 percent, or MXP675 million, from last year's results. Reuters reports that the Mexican Peso's 2 percent gain against the dollar could help move revenues to some MXP2.507 billion in the final quarter. Meanwhile, EBITDA is predicted at MXP1.287 billion for the same period. Analyst Ana Gabriela Ocejo of Scotiabank Inverlat, explained in the report that higher sales plus consistent cost structures could translate into good end figures for the Company. TV Azteca, a major producer of Spanish-language television programming in the U.S and operates two national television channels in Mexico, controls 46.5 percent of mobile telephone company Unefon and 50 percent interest in Todito, a company that operates a Spanish-language Internet portal, Internet connection service and e-commerce marketplace in Mexico. CONTACT: Television Azteca SA de CV Periferico Sur 4121, C.P. 14141 Fuentes del Pedregal, Phone: (212) 815-2206 Fax: (212) 571-3050 E-mail: rvillarreal@tvazteca.com.mx Web Site: http://www.tvazteca.com.mx/ ===================== P U E R T O R I C O ===================== CENTENNIAL COMMUNICATIONS: Appoints New Senior VP ------------------------------------------------- On February 11, 2005, Thomas E. Bucks, Senior Vice President, Controller, announced his intention to resign from Centennial Communications Corp. effective February 22, 2005. On February 11, 2005, Frank Hunt, Vice President, Controller for Centennial's Caribbean operations was appointed to replace Mr. Bucks as Senior Vice President, Controller, effective February 22, 2005. Mr. Hunt is 40 years of age, has been with Centennial since 1997 and has held numerous positions within Centennial's corporate and Caribbean finance and billing organizations. It is expected that Centennial and Mr. Hunt will enter into a one-year employment agreement that provides for an annual base salary of $200,000 and a target bonus of $100,000. The term of Mr. Hunt's employment agreement will automatically renew for subsequent one-year terms unless Centennial or Mr. Hunt give notice of non-renewal. It is expected that Mr. Hunt's employment agreement will provide for one-year of severance in the event of his termination of employment under specified circumstances. During his employment term and for a period of one year following the termination of his employment, it is expected that Mr. Hunt will be subject to certain non-competition and non- solicitation provisions. ================================= T R I N I D A D & T O B A G O ================================= NBN: Government Fires Board --------------------------- National Broadcasting Network's (NBN) Board of Directors proved to be another casualty in the closure of the state-owned media company after the government terminated their services Monday. The Trinidad Guardian reveals that the Board's dismissal comes after the retrenchment of around 255 workers last month. The eport adds that Airports Authority director Louis McSween could be the likely replacement to former board chairman Ulric Warner. The government had previously intended to retain the board during the changeover to the Caribbean New Media Group (CNMG), an agency created to replace NBN. Mounting losses and falling viewership triggered NBN's closure last year. Criticisms over alleged partiality to the government also eroded the Company's credibility and led to its decline. ================= V E N E Z U E L A ================= PDVSA: France's Total Seeks Accord on Sincor II By Aug. ------------------------------------------------------- French oil producer Total expects to sign a preliminary accord with Venezuela's state oil firm PDVSA to develop its Sincor II heavy oil upgrade project by August this year, reports Business News Americas. Total President Thierry Demarest recently announced that the project "represents an investment of US$5bn over seven years." The Sincor II project, which would involve further development of the existing Sincor heavy crude venture in Venezuela's so- called Orinoco oil belt, will include three partners: Total, Norway's Statoil and Petroleos de Venezuela, or PDVSA. "We have the intention to (keep) the three companies together for Sincor II," said Demarest. PDVSA: Mulls Asset Sale in U.S. ------------------------------- PDVSA plans to insulate itself from the American market by divesting some of its assets in the U.S., reports El Universal. Mr. Ivan Orellana, a member of the Board, revealed that the state-owned oil giant intends to reduce exposure to the market by strategically selling properties in some areas. However, Mr. Orellana did not elaborate on the fate of Citgo, PDVSA's refining and marketing branch in the United States. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and Lucilo Junior M. Pinili, Editors. Copyright 2005. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. 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